Correlation Between PT Homeco and Bank Central
Can any of the company-specific risk be diversified away by investing in both PT Homeco and Bank Central at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining PT Homeco and Bank Central into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Homeco Victoria and Bank Central Asia, you can compare the effects of market volatilities on PT Homeco and Bank Central and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in PT Homeco with a short position of Bank Central. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Homeco and Bank Central.
Diversification Opportunities for PT Homeco and Bank Central
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between LIVE and Bank is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding PT Homeco Victoria and Bank Central Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Central Asia and PT Homeco is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on PT Homeco Victoria are associated (or correlated) with Bank Central. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Central Asia has no effect on the direction of PT Homeco i.e., PT Homeco and Bank Central go up and down completely randomly.
Pair Corralation between PT Homeco and Bank Central
Assuming the 90 days trading horizon PT Homeco Victoria is expected to under-perform the Bank Central. In addition to that, PT Homeco is 2.05 times more volatile than Bank Central Asia. It trades about -0.29 of its total potential returns per unit of risk. Bank Central Asia is currently generating about -0.06 per unit of volatility. If you would invest 1,019,913 in Bank Central Asia on September 1, 2024 and sell it today you would lose (19,913) from holding Bank Central Asia or give up 1.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Homeco Victoria vs. Bank Central Asia
Performance |
| Timeline |
| PT Homeco Victoria |
| Bank Central Asia |
PT Homeco and Bank Central Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Homeco and Bank Central
The main advantage of trading using opposite PT Homeco and Bank Central positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Homeco position performs unexpectedly, Bank Central can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Bank Central will offset losses from the drop in Bank Central's long position.| PT Homeco vs. Bank Central Asia | PT Homeco vs. Bank Rakyat Indonesia | PT Homeco vs. Bayan Resources Tbk | PT Homeco vs. Bank Mandiri Persero |
| Bank Central vs. Bank Rakyat Indonesia | Bank Central vs. Bank Mandiri Persero | Bank Central vs. Bank Negara Indonesia | Bank Central vs. Astra International Tbk |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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